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Fourth schedule

The Eighth Schedule to the 1948 Companies Act laid down extensive requirements to which the annual accounts of limited companies had to comply both in form and content. It applied specifically to every balance sheet and every profit and loss account together with notes appertaining thereto which was laid before a company in general meeting and/or filed with the company’s annual return. The matters to which it referred included both the manner of calculating and of stating various items of income and expenditure and the method of computing the appropriate value of assets and liabilities. Separate parts of the Eighth Schedule applied to the preparation of group accounts and those of specialist companies.

This schedule was altered marginally by the 1967 Companies Act and extensively by the 1981 Companies Act, in which it was restated as Part I to the First Schedule to that Act. The 1981 Act also introduced the concept of standard formats for both balance sheets and profit and loss accounts. giving two alternatives for the former and four for the latter. All companies registered under the Act must adopt one of these given formats, as modified by the notes also contained in the Act, both as to the stated headings and the items listed under those headings. This requirement is, however. subject to the overall necessity of providing a true and fair view, and if the directors or auditors can show that in order to show such a view deviations from the formats are essential then such changes are admissibie.

The Companies Act 1985, which repealed previous Companies Acts, has reaffirmed the provisions of the 1981 Act and the legal regulations affecting company accounts are now contained in the Fourth Schedule to the 1985 Companies Act.

Reference: The Penguin Business Dictionary, 3rd edt.